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One day after he rocked Wall Street by slashing the pay of top executives at banks with federal bailout money, Treasury pay czar Kenneth Feinberg said Thursday that he hoped his cuts would prompt other companies to act on their own and rein in excessive compensation.
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POLITICO 44

One day after he rocked Wall Street by slashing the pay of top executives at banks with federal bailout money, Treasury pay czar Kenneth Feinberg said Thursday that he hoped his cuts would prompt other companies to act on their own and rein in excessive compensation.

“I’d like to think that these standards will be voluntarily picked up across the marketplace,” Feinberg said to a packed pen-and-pad briefing for reporters. At the same time, he said he was aware of the legal limits of his authority. “I have a very limited mandate here,” he said.

Speaking publicly for the first time since announcing the cuts, Feinberg revealed new details about the months-long executive compensation process, including that he rejected the initial proposals of every single company involved. And he said that the law that created his office included inherent conflicts between pushing the companies to moderate their behavior and ensuring that the companies pay back taxpayer money they received under the government’s Troubled Asset Relief Program.

“This assignment was very, very difficult,” Feinberg said.

Even as he was briefing reporters on the new pay packages, Feinberg got an endorsement from President Barack Obama, who said Feinberg took “an important step forward today in curbing the influence of executive compensation on Wall Street while still allowing these companies to succeed and prosper.”

Treasury Secretary Timothy Geithner also weighed in with support, saying in a statement: “We all share an interest in seeing these companies return taxpayer dollars as soon as possible, and Ken today has helped bring that day a little bit closer.”

The financial sector, for the most part, continued to offer only muted reaction. That’s because the companies directly involved don’t want to be seen as begging for more taxpayer-financed raises. Also, non-TARP companies are quietly thrilled at the prospect of being able to poach top talent from their humbled rivals.

One industry executive offered this assessment on the condition that his name not be used: “Pay restrictions repel talent and weaken our position as a global leader in the capital markets.”

“Ultimately,” he said, “such restrictions will make it much harder for those companies to pay back the U.S. taxpayer, which will certainly prolong government intervention, which is contrary to President Obama’s often-stated goal of exiting these companies as soon as possible.”

Separately, the Federal Reserve unveiled a proposal to make executive compensation a key piece of its safety and soundness regulation of U.S. banks. The proposal would extend federal influence far beyond the seven TARP banks by requiring banks generally to propose new pay plans that better create incentives for executives to consider the long-term health of the bank as they make decisions.

Meanwhile, in a briefing room at the Treasury building, the man at the center of the controversy offered a blunt assessment of the process.

Feinberg said that not one of the seven TARP companies sent in an initial proposal that was up to his standard. “The numbers that were submitted by the companies without exception I found to be inconsistent with the public interest,” Feinberg said. He told the companies that their proposed pay packages were too high, and they didn’t include the right mix of cash and long-term stock compensation that would bind the executives’ interests to the future health of the company.

By Feinberg’s reading of the law that created his office, Obama had no legal authority to veto or modify the pay plan he submitted Wednesday, he said. “The White House has played absolutely no role whatsoever,” Feinberg said. “Zero intervention by the White House in this process.”

Feinberg praised his plan as a “pretty good, solid piece of work,” adding, “I don’t see any loopholes.”

And he showed off his mastery of the details, at one point referring a reporter to an arcane detail in the plan. “It’s on Page A8 and A9,” Feinberg said. “I know it by heart.”

Feinberg referred to himself by the official title of his office: special master.

“I really do not approve of this characterization of me as a czar,” Feinberg said. “I’m no czar.”

HOW MUCH DO YOU MAKE PER YEAR, AND WHO SET YOUR SALARY, SIR??????? Who reviews your performance, since you are apparently working un-supervised by Obama?

What the supreme insult is this:

the WH thugs think by Obama feigning ignorance of things, that he can remain untouched. That is truly stupid of them. The buck stops in the Oval Office on his desktop!!! He did not know what this pay czar was up to? bull hockey......the man was following the Baby-In-Chief's directive. If you name a czar without Congressional approval, you are responsible for anything that person does. If you ever worked a real job, you would know that.

HOW MUCH DO YOU MAKE PER YEAR, AND WHO SET YOUR SALARY, SIR??????? Who reviews your performance, since you are apparently working un-supervised by Obama?

What the supreme insult is this: the WH thugs think by Obama feigning ignorance of things, that he can remain untouched. That is very unwise. The buck stops in the Oval Office on his desktop.He did know what this pay czar was up to.......the man was following the Baby-In-Chief's directive. If you name a czar without Congressional approval, and that czar reports directly to you by design, then you are responsible for anything that person does. If you ever worked a real job, you would know that.

I don't like how Wall Street has acted, but the bottom line is the democrats are just as guilty as they are. They did all of the bad mortgages by forcing banks through groups like ACORN to loan to people they knew they should not.

Feinberg is ILLEGAL. He does not have the authority, or for that matter neither does Obama to break contracts and change these people's pay. I hope they go to federal court and FORCE the administration to stop these dictatorial, tyrannical policies now before he goes further.

If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen.”—Samuel Adams

I support Obama on this decision. I have no problem with these executives giving themselves huge bonuses AFTER they give the taxpayer their money back. Not before. Kudos.

The scope of your thinking is way too limited.

It's the precedent that government can dictate private sector pay that is the evil here.

The scumbags that took the government money walked into this trap themsleves. They are not the real issue - they are being used as pawns in a bigger game. I have no sympathy for them. These people should go down along with thoise who created the petri dish for this corruption, advocated it, and protected it. Barney Frank, Chris Dodd, the Fannie Mae and Freddie Mac officials, and all ithe other government oficials that coerced banks into making bad loans.

By getting you to focus on a tree, the government is distracting you from the rest of the forest.

He does not have the authority, or for that matter neither does Obama to break contracts and change these people's pay.

If you had listen to his NPR interview, you would not have written such. The contracts were voluntarilly transfered to his authority when the institutions accepted tax payer money. He has the legal authority for his actions.

So can Feinberg force John Corzine, the corrupt governor of New Jersey, to pay back the hundreds of millions of dollars he made at Goldman Sachs during his time there? Or is it as usual with you liberals, if it is Bill Gates, Warren Buffett, Google founders, Corzine, Kennedy's, etal. it is OK to be wealthy, but heaven forbid if it is Rush, Glen, Rupert or anyone else that does not speak what you people want to hear?

Liberals, you have no real answers except hate for the people who actually make something for themselves and I am positive that these people will never be covered by a hate crimes bill.

This decision worries me so much. It puts on a very scary very slippery slope. If the government can justify cutting the pay of these companies how long is it going to be until they decide they can dictate the pay of everyone? The idea of punishing the successful is becoming more and more popular these days, equal pay for all could become a popular idea. Absolutely terrifying

I just want to give major KUDOs to the makers of www.Dearpolitician.org. I was on foxnews yesterday and someone suggested going to them to write my politicians. Thanks to me losing my job, I now live on a really tight budget and not having to buy the paper and stamps to send the morons in government is great. I faxed 36 politicians yesterday for free. I like the fact that they get my letter the same day. Good Job Dearpolitician.org.

I just want to give major KUDOs to the makers of www.Dearpolitician.org. I was on foxnews yesterday and someone suggested going to them to write my politicians. Thanks to me losing my job, I now live on a really tight budget and not having to buy the paper and stamps to send the morons in government is great. I faxed 36 politicians yesterday for free. I like the fact that they get my letter the same day. Good Job Dearpolitician.org.

Is this guy kidding or what when he suggest he hopes others follow his lead volunatrily? So if a firm does not or did not accept fed bail out moneys, they should voluntarily reduce the pay of the company's chief officers? What happened to the shareholders right to act on what they feel is excesive pay based upon the return they get. Hey, if a company is paying me $1.00/share in earnings and the stock price continues to rise and meet my expectations, then the guy at the top can make what he board of directors feel he is worth. If it does'nt meet my expectations, then I sell the stock.

During his interview yestereday he also gave one of the most lame excuses why the guy the government hired to run AIG was worth $7 million/yr in salary. Feinerg another well connected lawyer who just doesn't get it. I'm sure he lives in a run down house and neighberhood in Detroit or some other city whacked by the ploticians and unions. NOT!!!

Other companies who were not bailed out should not be affected by this at all. I don't have a problem with this if your com[pany took TARP funds. If you needed a government hadout to stay afloat, you should be out of business. As far as the argument goes that the good people will leave, good, as I stated your TARP funded company should already be out of business. And it's a great disincentive to ask for government help. AIG should be out of business, not sponsoring Manchester United while pocketing government funds.

First he goes after those that received TARP money. As I said yesterday and Obama said today, now we go after the public companies that didn't take TARP money on behalf of the stockholders. Obama is now offering small businesses loans. I advise you not to take the bait. What kind of demands will be placed on YOU after the fact?....and Who is next on Obama's List.

If I were one of these executives I'd make my stand now......I'd challenge his authority to make such a decision and, if need be, I'd file a Constitutional Challenge suit against this decision. The only thing that will come out of this is the companies involved will not be able to compete for the brightest minds in their prospective industry.

This is the most blatantly Communistic thing I've ever seen an administration do. How can this be justified in America???????